KARACHI: Pakistan Stock Exchange (PSX) staged a late recovery after a volatile trading period marked by geopolitical uncertainty, although the benchmark KSE-100 index still ended the first month of the current fiscal year lower.
According to Topline Securities Ltd, the index closed July down 4,208 points or 2.3 per cent month-on-month as escalating US-Iran tensions pushed global crude oil prices higher, weighing on investor sentiment.
During the month, the Pakistan Bureau of Statistics reported inflation, measured by Consumer Price Index (CPI), eased to 11.07pc in June from 11.66pc in May. Workers’ remittances stood at $3.5 billion in June, up 2pc year-on-year but down 18pc from the previous month.
Net foreign direct investment fell sharply to $14 million in June from $214m in May, while the real effective exchange rate rose to 106.44 from 106.08. The current account posted a deficit of $649m in June, reversing a surplus of $500m recorded in May. Meanwhile, car sales reached 22,741 units, rising 4pc year-on-year and 29pc month-on-month.
Weekly gain of 5,073 points cushions monthly loss
Average daily traded volume during the month stood at 845 million shares, while average daily traded value was Rs37.5bn.
Arif Habib Ltd (AHL), however, highlighted a strong weekly recovery, with the KSE-100 index gaining 5,073 points, or 2.97pc, to close at 176,094 points.
The market rallied sharply on Monday, adding 7,241 points after tensions between the US and Iran temporarily eased, raising hopes of a diplomatic breakthrough. The recovery lost momentum later in the week as geopolitical uncertainty resurfaced, although the market rebounded on Friday as investors cherry-picked at attractive levels.
The State Bank’s Monetary Policy Committee left the policy rate unchanged at 11.5pc, in line with market expectations.
Petroleum imports increased 2pc year-on-year to 17.6 million tonnes in FY26, supported by higher crude oil imports, while imports of motor spirit and high-speed diesel declined amid subdued demand and improved domestic refinery output. Local crude production rose 4pc year-on-year to 64,675 barrels per day.
RLNG supply fell 28pc year-on-year, reducing its share in the national gas mix to 19pc, while petroleum exports rose 10pc to two million tonnes, led by higher furnace oil exports.
The federal government approved amendments to the Refinery Policy 2023, aimed at attracting around $6bn in investment, accelerating refinery upgrades and promoting Euro-V fuel production through a seven-year incentive package.
Gas production increased 1.7pc week-on-week to 3,056 million cubic feet per day during the third week of July, driven by higher output from the Mari, Uch, Kandhkot and Shewa fields. Oil production also edged up 0.3pc to 71,540 barrels per day.
Pakistan’s external position received support after Saudi Arabia rolled over its $5bn deposit for another three years, while State Bank of Pakistan’s (SBP) foreign currency purchases of $9bn from the domestic market during FY26 also eased financing pressures.
According to AHL, banks contributed the most to the benchmark index during the week, adding 1,975 points, followed by fertiliser, cement, exploration and production companies, and investment banks. The real estate, sugar, miscellaneous, auto parts, and textile weaving sectors posted marginal declines.
Among individual stocks, Fauji Fertiliser Company, United Bank Ltd, Meezan Bank, Habib Bank and Engro Holdings were the biggest positive contributors, while Systems Ltd, Pioneer Cement, TPL REIT Fund-I, Habib Metropolitan Bank and Pakistan Engineering Company weighed on the index.
Average daily trading volume increased 19.4pc week-on-week to 831.3 million shares, while average daily traded value rose 14.2pc to $114m.
AKD Securities also attributed Monday’s rally to a pause in US-Iran hostilities, which pushed international oil prices below $85 per barrel. Although uncertainty persisted for most of the week, improved corporate earnings and optimism over Pakistan’s diplomatic efforts supported sentiment.
The brokerage noted that SBP foreign exchange reserves declined by $229m to $17bn as of July 24, while the rupee appreciated marginally to Rs277.80 against the US dollar.
Other developments included the approval of export finance incentives, Saudi investment interest of up to $10bn and renewed efforts to expand economic ties with Kuwait.
Looking ahead, analysts said investor sentiment would remain closely tied to developments in the US-Iran conflict and movements in international oil prices. They added that June-quarter corporate earnings would be a key driver of market performance, with valuations remaining attractive at a forward price-to-earnings ratio of 7.8 times.
Published in Dawn, August 2nd, 2026
